June 25, 2008 / Issue No. 4-08
 
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Climate Change
EPA Will Solicit Public Input on Regulating Greenhouse Gas Emissions from Construction Equipment
States, Environmentalists Seek National Restrictions on Greenhouse Gases from Construction Equipment
EPA to Establish Nationwide, Mandatory Greenhouse Gas Reporting System by 2009
Senate Begins Consideration of Climate Change Legislation; Delays Further Action
Contractors Build “Green” To Achieve Climate Change Goals

  EPA Will Solicit Public Input on Regulating Greenhouse Gas Emissions from Construction Equipment
Pressure Mounts to Force Agency to Act
The U.S. Environmental Protection Agency (EPA) plans to issue an advance notice of proposed rulemaking (ANPR) in June 2008 to “discuss and solicit public input” on how to control greenhouse gas (GHG) emissions from engines in construction equipment, as well as broad range of other mobile and stationary sources. This announcement comes a year after the U.S. Supreme Court ruled in the Massachusetts v. EPA case that EPA has the authority to regulate GHGs from new motor vehicles and must do so if it determines that GHG emissions from such sources may “endanger public health or welfare”  Despite consistent pressure from states and environmental groups, EPA has yet to publicly issue a so-called “endangerment finding,” which is a requisite first step to any EPA action to regulate GHGs as pollutants under the Clean Air Act (CAA).

Rather than limit its GHG review to new motor vehicles, EPA has decided to consult with the public on how the regulation of GHG emissions under one provision of the CAA interacts with, and could lead to, regulation of GHG emissions under other provisions of the Act.  According to EPA, the ANPR will facilitate its response to the Supreme Court’s ruling in the Massachusetts case (further discussed below) by providing the agency with information on the best available science relevant to making an endangerment finding and the implications such a determination would have on the future regulation of both mobile and stationary sources under the Act.  EPA believes that the “global” ANPR approach gives appropriate attention to the complexities involved and is critically important in deciding how to proceed.

Critics are questioning EPA’s motives, however, accusing EPA of unlawfully delaying its response to the Supreme Court’s ruling by taking on such a broad ANPR that reports to go way beyond the ruling, which directs EPA to reconsider only whether new motor vehicle GHG emissions meet the CAA’s endangerment test.  Asserting that human health and welfare are at stake, a consortium of states, cities and environmental groups recently returned to federal court to press EPA to promptly act on the court-mandated endangerment determination for new motor vehicles (further discussed below). 

Taking a different stance, the U.S. Chamber of Commerce, the world’s largest business federation, has applauded EPA’s decision to issue a broad ANPR on GHGs, calling it a “first time… honest discussion… of the impacts [the] regulation would have down the line… [and] what the consequences will be.”  AGC remains focused on the fact that an affirmative endangerment finding related to new motor vehicles would open the door for widespread regulation of GHG emissions from a broad range of sources, including construction equipment emissions. 

Following is an in-depth look at the issues discussed above.

The Massachusetts v. EPA Greenhouse Gas Decision

A sharply divided U.S. Supreme Court held last year that EPA has authority under the CAA to regulate carbon dioxide (CO2) and other GHG emissions from new motor vehicles — specifically on-highway or on-road vehicles, including passenger cars, light trucks, heavy-duty trucks, buses and motorcycles covered by CAA Section 202 (Massachusetts v. EPA, U.S., No. 05-1120, 4/2/07). The Supreme Court’s decision requires EPA to regulate such sources if the agency makes a so-called “endangerment finding.” 

Specifically, whether EPA is required to exercise its CAA authority (i.e., regulate GHGs) hinges on whether CO2 or other greenhouse gases cause, or contribute to, air pollution that may reasonably be anticipated to endanger public health or welfare. The Supreme Court remanded this question to EPA, explaining:

If EPA makes a finding of endangerment, the Clean Air Act requires the agency to regulate emissions of the deleterious pollutant from new motor vehicles. ... Under the clear terms of the Clean Air Act, EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do. 

The Supreme Court did not go so far as to require EPA to make an endangerment determination or to set a deadline by with EPA must issue its finding.  It remanded the matter to EPA to reevaluate its decision not to regulate GHGs and directed EPA to “ground its reasons for action or inaction in the [CAA].”

This 2007 decision stems from a 1999 rulemaking petition filed by 19 environmental groups seeking to compel EPA to regulate GHG emissions from new motor vehicle engines.  EPA denied the petition in 2003 based on its review of the Clean Air Act, stating that it “can not and should not” regulate GHG emissions.  Rather than addressing the merits of whether GHGs “endanger public health or welfare,” EPA concluded that it lacked statutory authority to address global climate change.  EPA also contended that even if it did have statutory authority to regulate GHGs, doing so would be unwise given scientific uncertainty and political and foreign policy considerations. 

The original petitioners, joined by several states and local governments, sought review of EPA’s decision in the U.S. Court of Appeals for the District of Columbia.  The D.C. Circuit upheld EPA’s decision (Massachusetts v. EPA, D.C. Cir., No. 03-1361, 7/15/05) and the petitioners then appealed to the Supreme Court, as described above.

Is EPA ‘Stalling’ on Climate Change?

Critics are accusing EPA of avoiding the climate change debate and unreasonably delaying action in response to the Supreme Court’s mandate.  They view the ANPR announcement as a signal that EPA does not intend to address global warming pollution before this Administration leaves office. 

Documents and testimony gathered during recent Congressional hearings allege that EPA developed a draft endangerment determination (concerning new motor vehicle-related GHG emissions) as well as proposed regulations and submitted the documents to the White House Office of Management and Budget in December 2007.  But EPA officials say that was only a draft document, and they are working on a national plan — called the ANPR.

Indeed, EPA Administrator Stephen Johnson has indicated that the stricter fuel efficiency standards (CAFE standards) and an increase in the use of renewable fuels called for by the December 2007 Energy and Independence Security Act fulfilled EPA’s obligation to regulate GHG emissions from new motor vehicles.  At this point, it appears that EPA is still determining whether an endangerment determination is necessary in light of these new CAFE standards. 

EPA Faces Rulemaking Petitions

States and environmental organizations have apparently lost patience with EPA and have resorted, once again, to legal action.  Eighteen states, three cities and 11 environmental groups filed a petition for a “writ of mandamus” April 2 asking a federal court to order EPA to decide within 60 days whether to regulate GHG emissions from new motor vehicles (Massachusetts v. EPA, D.C. Cir., No. 03-1361, petition filed 4/2/08).  To date, there have been no reports of any action.

Regardless of what comes of EPA’s motor vehicle endangerment determination, a host of other rulemaking petitions are currently pending that may force EPA to address the merits of whether GHGs pose a risk and are subject to regulation under the CAA.  Most recently, California and five other states filed a petition requesting that EPA develop GHG emission regulations for off-road diesel engines, including those used in construction equipment.  EPA has until the end of July 2008 to respond.  Admittedly, EPA’s decision to broaden the mobile source part of the ANPR is partly a reaction to the onslaught of various legal filing from states and environmentalists asking EPA to regulate GHGs from engines in construction equipment and other sources (see related story this issue).

Implications of an Endangerment Finding

If EPA makes an endangerment finding under CAA Section 202 (covering new motor vehicles), it may force GHG emissions rules under other CAA provisions with potentially far reaching implications for industry.  There are several provisions in the Act that contain endangerment language similar to that found in Section 202.  A finding of endangerment for GHGs under one provision of the Act could thus have ramifications for findings of endangerment under other provisions of the Act.  EPA has cited this possibility as a basis for looking at all sources of GHG emissions in its ANPR.

For example, EPA has the authority to regulate emissions from off-road (also called “nonroad”) engines and vehicles if EPA determines that pollutants from these sources “may endanger public health or welfare” (CAA Section 213). (Like the standards for motor vehicles, the emission standards for these engines and equipment would only apply to new engines or equipment.)  Similarly, EPA may control fuels or fuel additives used in motor vehicles or off-road engines where the emissions products cause or contribute to air pollution that “may reasonably be anticipated to endanger public health or welfare” (CAA Section 211).  However, AGC continues to point out that construction companies currently have no technological options available for limiting CO2 emissions from construction equipment. Indeed, EPA does not regulate CO2 emissions from new off-road engines. Likewise, EPA’s voluntary diesel retrofit program — aimed at reducing emissions from in-use equipment — does not attempt to track CO2 emissions nor does that program identify whether EPA’s “verified” after-treatment technologies would cut back on CO2.

Moreover, recent news reports allege that any GHG regulations could halt building construction.  Once EPA controls a GHG under almost any section of the CAA (even if the regulation is for vehicles or fuels), most buildings in the U.S. that emit that pollutant would become subject to costly and time-consuming permitting and construction requirements under EPA’s Prevention of Significant Deterioration (PSD) program.  As a general matter, no new or existing “major” stationary sources of GHGs could be built or modified if the construction would increase net emissions, without first undergoing the PSD permitting process and installing best available control technology for each pollutant subject to regulation under Act.  These requirements apply regardless of whether a National Ambient Air Quality Standard for the pollutant exists.  New schools, nursing homes, and hospitals could be considered a “major source” under this section of the Act.  Also most large buildings heated by furnaces using fossil fuels or buildings of any size using natural gas or businesses that generate CO2 as a component of their operations would likely be deemed “major sources.”

In addition, the following sections of the Act use “endanger public health or welfare” language that is substantially similar to CAA Section 202 to determine which air pollutants EPA must regulate:

  • National Ambient Air Quality Standards (NAAQS) - Section 108 (creating a list of criteria air pollutants), Section 109 (requiring EPA to establish NAAQS), and Section 110 (compelling states to develop State Implementation Plans or SIPs to comply with NAAQS)
  • New Source Performance Standards - Section 111 (regulating emissions from stationary sources)
  • Hazardous Air Pollutants - Section 112 (regulating hazardous air pollutants from stationary sources)

At a recent event, an EPA official cited other CAA requirements that could be affected by climate change regulations, including: air toxics rules; Section 115 provisions that address impacts of U.S. pollution on other countries; and Section 615 provisions related to stratospheric ozone protection.

Therefore, if EPA regulates any GHG emissions under Section 202, it may be forced, perhaps through litigation, to regulate greenhouse gases from a host of other mobile and stationary sources.  This could very well lead to the absurd result of having states trying to reduce global ambient levels of carbon dioxide emissions through enforceable SIPs.  The NAAQS regulatory structure, with its state-by-state implementation plans and county-by-county attainment and non-attainment designations, is designed to address local or at most regional air-pollution problems. In contrast, because of CO2's long residence time (50-200 years), CO2 levels are nearly uniform throughout the global atmosphere.

Future Outlook

As a practical matter, it will take years for EPA to comply with the Supreme Court’s ruling in Massachusetts v. EPA.  In the meantime, climate policy will not stand still.  Many state and local governments have instituted or are beginning to experiment with climate-related policies of various sorts.  Foreign nations and international organizations are simultaneously developing emission targets and cooperative agreements.  Some believe that the Supreme Court’s ruling provides a compelling reason why Congress must act and the President must sign comprehensive climate change legislation.  To this end, on April 16, the President proposed a new national goal to stop the growth in U.S. greenhouse gas emissions by 2025 by building upon existing laws, adhering to certain principles, and providing incentives to encourage new, lower emission technologies to reduce emissions by 2025.  In addition, in early June, the U.S. Senate recently began consideration of a bill that would establish a “cap and trade” scheme to reduce greenhouse gas emissions by more than 70 percent of 2005 levels by 2050 (see related story this issue.  Should either of these or other climate proposals become law, it would likely impact any future EPA action to regulate regulating GHG emissions under any provision of the Clean Air Act.

For more information, contact Leah Pilconis, Senior Environmental Advisor to AGC of America at pilconisl@agc.org. [ return to top ]